In 2016, the
Local Government Act 1995 was amended to allow two or more local governments to establish a statutory corporation known as a regional subsidiary.
A regional subsidiary is:
The formation of a regional subsidiary is an exception to the general rule that local governments cannot acquire or form a corporation.
However, a regional subsidiary can only be formed for non-commercial goals, such as providing services to the community or increasing the efficiency of existing local government operations.
A regional subsidiary is designed to be a convenient way for local governments to pool their resources and cooperate more closely with neighbouring districts.
In addition to increasing the efficiency of existing services, a regional subsidiary may increase the viability of new services which local governments want to provide. It may also form a mechanism for groups of local governments to come together to deal with region-specific issues.
The regional subsidiary is predominantly governed by its charter, which can be individually tailored to suit the subsidiary's activities and role in the community.
The following table lists some examples of what a regional subsidiary can potentially be formed to accomplish. This list is not exhaustive.
The process for establishing a regional subsidiary is set out in the Local Government (Regional Subsidiary) Regulations 2017.
This process involves:
Once the Minister's approval is obtained, the subsidiary will exist as a legal entity from the day specified in the approval.
More information on the establishment process can be found in the documents below.
Drafting a business plan (DOCX 339KB)
Public consultation (DOCX 298KB)
Drafting a charter (DOCX 305KB)
Ministerial approval policy (DOCX 343KB)
Once a subsidiary is established, it will continue to operate as a separate legal entity until:
The actual lifespan of a subsidiary will be specified in the subsidiary's charter, which in turn will depend on the role that the subsidiary is intended to perform.
For example, the charter may provide that the subsidiary exists for as long as the member councils wish it to. Alternatively, the charter may specify that the subsidiary is to be wound up after a specified amount of time, or after achieving a specific objective.
The formation of a subsidiary is a complex matter, since each subsidiary will be formed in unique circumstances and every charter will be individually drafted.
For this reason, it is advisable to contact the department prior to the preparation of any business plans or charter documents, so that appropriate support and advice can be provided at every step of the establishment process.
While the approval of a proposal is never guaranteed, the department is committed to ensuring that viable proposals are given a chance to deliver positive outcomes for local communities.
Director General Department of Local Government, Sport and Cultural Industries GPO Box R1250, PERTH WA 6844